Accounting: Tools for Business Decision Making, 5th Edition

Published by Wiley
ISBN 10: 1118128168
ISBN 13: 978-1-11812-816-9

Chapter 3 - The Accounting Information System - Questions - Page 137: 13

Answer

(a) Both Debit and Credit Entries (b) Both Debit and Credit Entries (c) Both Debit and Credit Entries (d) Credit Entries Only (e) Debit Entries Only (f) Credit Entries Only

Work Step by Step

(a) Debit Entries when cash received and credit Entries when cash is paid (b) Debit Entries when sales are made, Credit entries when cash is received (c) Dividends payable is a temporary account maintained until cash is paid against dividends. (d) Credit entry is made when credit purchases are made and debit entry is made when cash is paid against credit purchases. (e) Only debit entries when salaries are incurred (f) Only Credit entries when sales are made.
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